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Transferring a Home Before Bankruptcy
A reader asks: My father fell critically ill earlier this year. As a result, he is unable to pay his credit cards as he is not working. The bills are very large. He has no financial assets other than his a commercial property (owned outright). What options does he have? In relation, can the property be sold to my brother and/or proceeds transferred to him (inheritance), then my father proceed to file bankruptcy without repercussions? Here is a breakdown of his finances: $1.2m – commercial property – owned outright Approx 60-80k in credit card debt only Zero income stream from any source, sadly. My father is not a future planner.…
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Understanding the bankruptcy discharge (Video)
Summary Vincent has decided to file for bankruptcy. His Licensed Insolvency Trustee outlines what debts will be discharged in a bankruptcy and how long the process takes. Meet Vincent, a father of two young children. A recent separation has left him unable to meet his financial obligations. After having his options explained by a Licensed Insolvency Trustee, a professional whose duties are regulated by the Office of the Superintendent of Bankruptcy Canada, Vincent has decided that bankruptcy is the most appropriate solution to his financial troubles. The trustee explains that after fulfilling his bankruptcy obligations, his debts will be discharged and he will be free to start over financially. The…
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What to expect if you file for bankruptcy (Video)
Summary After talking with a Licensed Insolvency Trustee, David and Julie decide that bankruptcy is the most appropriate option to handle their debts. The trustee explains the way their creditors will be paid and what they will need to do during the bankruptcy process. It’s been a tough time for David and Julie —David has been laid off, credit card payments have slipped and the other bills are also falling behind. Thinking bankruptcy may be an option, he sits down and begins an online search to get information about the topic. He finds the Office of the Superintendent of Bankruptcy Canada, the federal organization that licenses and regulates Licensed Insolvency…
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Can Creditors Take my Car?
“Can creditors take my car?“ This is a common question and the answer depends on the circumstances… If your car is financed and the lender has registered a lien against it, then you’ll need to continue making your loan payments. Otherwise, the lender will repossess the vehicle. Such a lender is called a “secured” lender in that it has security over your vehicle and has a right to repossess it in the event of non-payment of the loan. Now let’s suppose you own your car outright (i.e., it’s not subject to a loan), but you owe money to “unsecured” creditors like credit card companies, payday loans and the like. If…
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Replacing your Licensed Insolvency Trustee
So you’ve filed your personal bankruptcy or consumer proposal with a Licensed Insolvency Trustee but for whatever reason, you haven’t been happy with the service you’ve received. Is it possible to replace your Trustee? This will depend on the type of engagement you’re currently undergoing. CONSUMER PROPOSAL Your proposal hasn’t yet been approved If you’ve filed a consumer proposal and it’s been deemed approved by your creditors and the bankruptcy court (i.e., it’s been more than 60 days since the day your proposal was filed and no meeting of creditors has been called), then you’re stuck with your Trustee. However, if your consumer proposal has not yet been deemed approved…
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Keeping RRSPs When Filing Bankruptcy
There are 2 types of RRSPs: (1) RRSPs set up with a life insurance company; and (2) RRSPs set up anywhere else, like with a bank or mutual fund company. An RRSP set up with a life insurance company is also called a segregated fund. This type of RRSP will always have a designated beneficiary if the debtor dies. If the beneficiary of the RRSP is the child, grandchild, parent, grandparent, or spouse of the debtor, then the RRSP is exempt from seizure by a trustee in bankruptcy under the Ontario Insurance Act. Under the Bankruptcy and Insolvency Act, all other RRSPs are exempt from seizure by the trustee. However,…
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Keeping a Home When Filing Bankruptcy
One of the questions we’re most often asked is: “can I keep my home if I file for personal bankruptcy?” The answer to this question depends on your situation.There are 2 types of situations: The value of the debtor’s home is less than the mortgage balance; and The value of the home is more than the mortgage balance. Home Value < Mortgage Balance In this case, there is no equity. If there is no equity in the home and the debtor files for bankruptcy, the trustee has no interest in the home. It would be pointless for a trustee to sell the home and not even have enough money to…
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Bankruptcy and Gambling Debt
Gambling has become a major problem in our society. I have come across many individuals who became heavily indebted because of compulsive gambling. Filing for personal bankruptcy is an option that naturally comes to mind if someone finds herself with a lot of gambling debt. However, there are a few things one should be made aware of: Filing personal bankruptcy does NOT automatically get rid of your debts. Filing bankruptcy only protects you from legal proceedings by your creditors (the legal term is “stay of proceedings”). To get rid of your debts, you must obtain your discharge from bankruptcy. For a first time bankrupt, a discharge will generally happen automatically…
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Bankruptcy After Divorce
Introduction Divorce or marital breakdown is one of the most common causes of financial hardship, which often leads to a spouse filing for bankruptcy. The effect of family support obligations, the division of family assets, and the loss of income can have a devastating effect on both parties going through a separation. As these situations are becoming more common, we thought it would be worthwhile to provide an overview of this topic. This article will be divided into two sections: Matrimonial Property and Family Support Obligations. For ease in reviewing the issues at hand, we shall refer to these two parties as “husband” and “wife” and assume that: they are…
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Creditor Proofing Tips for Business Owners
The failure of a prospective business owner to employ creditor proofing techniques before starting a business is a frequent cause of personal financial difficulties due to the failure of a business and the attendant business-related liabilities personally owed by the company owner. These individuals must often file for personal bankruptcy or make a consumer proposal to their creditors as result of business-related debts. Debtors completing their bankruptcy/ proposal often wish to start up another business sometime in the near future. The expected question then arises: how can they creditor-proof themselves in the event that their new business fails? Here are some ideas: Creditor proofing techniques 1. Consider incorporating the business.…
